In a presentence memorandum, Nathan Harper's lawyers say someone else—they don't say who—instructed the chief to create the slush fund. Harper, 61, is scheduled for sentencing Tuesday after pleading guilty last fall to conspiracy to commit theft and four counts of failure to file tax returns.

Federal prosecutors, however, contend Harper led the conspiracy and deserves 18 months to two years in jail, as dictated by federal sentencing guidelines.

"A fair and just sentence in this case will send a message to all public employees that theft and the failure to file tax returns will not be tolerated," Assistant U.S. Attorneys Robert Cessar and Lee Karl wrote in their own memorandum.

Harper joined the department in 1977, became chief in 2006 and resigned a year ago.

Former Mayor Luke Ravenstahl forced Harper to resign as details of a federal grand jury investigation leaked into the media and after Ravenstahl met with federal investigators.

Ravenstahl abruptly dropped his re-election bid in March—three weeks before Harper was indicted—saying speculation about the investigation and his personal life had become too much of a burden for him and his family.

Ravenstahl and his attorney have repeatedly denied wrongdoing, and authorities have not filed charges against him.

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The mayor has acknowledged his bodyguards had credit cards linked to the same unauthorized accounts for which Harper was prosecuted.

One of the bodyguards has said the investigation centers on whether city money was misspent by having the guards drive the divorced 33-year-old mayor to and from bars after business hours.

Harper has cooperated with the FBI. But defense attorney Robert Leight has said the former chief "has no information that's detrimental" to Ravenstahl.

In pleading guilty in October, Harper acknowledged diverting more than $70,000 in fees the city collected from businesses that hired police officers to work off-duty security details into two unauthorized credit union accounts. Harper then spent nearly $32,000, mostly for his own benefit. Harper also didn't file federal tax returns from 2008 to 2011, when prosecutors contend much of the money was misappropriated.

Putting the money into unauthorized accounts is considered theft because funds belonging to an agency that receives federal money must be kept in official government accounts.

Leight has said the other $38,000 in the slush fund accounts was spent on legitimate police business—including repairing the bullet-riddled vehicle of an officer slain in the line of duty in April 2009 and buying water for officers during the Group of 20 economic summit in September 2009.

Harper's attorneys acknowledge he set up the slush fund accounts, but they argue he was told to do that by someone else.

"He was doing as he had been instructed," the defense attorneys wrote. "Although it was not his idea to create this fund, he readily admits he misused it."